Understanding PayPal's Source Mix

[mandy]

Paypal is running a 1.5% cashback promo for payments made by bank or balance transfer

Paypal offers cashback for balance/bank 'sources'....

Background: Understanding PayPal's Source Mix

If you follow PayPal closely from a financial perspective, you realize that the key to model in PayPal is the 'source mix'.  To take a step back, there are essentially three ways to fund a PayPal transaction from the consumer's perspective:

  1. Credit card - This usually costs PayPal as much or more than their rate they charge merchants.  PayPal is highly motivated to REDUCE credit card usage.  In fact if credit card was 95%+ of the source, Paypal's margin would be devastated.
  2. PayPal balance - You are essentially moving money between PayPal's servers so there is little to no cost here.
  3. Bank account - Usually called ACH, this is a bank to bank transfer of $ and in most scenarios is very inexpensive to process (.25-.50)...

full article: http://ebaystrategies.blogs.com/ebay_str...ers-c.html